Daily Market Color March 6, 202010-Year Treasury Slips Below 0.7% Amid Virus Fears The 10-year Treasury yield fell below 0.7% for the first time. The economic impact of the virus continues to concern global investors, leading to growing demand for safe haven assets. The number of confirmed cases in the US grows by the day, especially in hubs like New York and Seattle. Yesterday, Dallas Fed President Robert Kaplan stressed the importance of these cases in his policy decision when he votes in the March FOMC meeting. Kaplan mentioned that “We’re just going to have to see what the actual developments are over the next 10 days, two weeks. That will be a key factor, yes, I will be using to judge what’s appropriate and whether we can wait longer” in response to a question about another rate cut. The 10-year Treasury yield continued to fall in yesterday’s trading session and current sits at 0.736%. OPEC has agreed on a reduction in oil production. During their meeting in Vienna, OPEC agreed to cut crude oil output by around 1 million barrels per day. This is expected to last till the end of June and would be shared by the 13 participating nations. This comes on the back of a pre-existing cut of 500,000 barrels per day – a decision that will last till the end of 2020. Goldman Sachs estimated a drop of 2.1 million barrels in global demand for oil. A major hurdle to yesterday’s accord — Russian Energy Minister Alexander Novak did not agree with OPEC’s decision and is currently in talks with President Putin. Saudi Arabia is calling for a joint decision to be announced by the end of their meeting today. Day ahead. It’s the first Friday of the month, however the monthly employment report seems far from the focal point of financial markets as we’ve typically grown accustomed to. Payroll additions totaled 273,000 in February, far exceeding median forecasts of +175,000, while the unemployment rate ticked lower to 3.5% — near 50-year lows. Much of this data will be taken with a grain of salt, as the current and future impact of the coronavirus cannot be captured. Wholesale inventories for January will be released later this morning and are expected to decrease 0.2% from last month. The coronavirus taskforce headed by the White House will hold a press briefing this evening. A Shadow FOMC meeting will be held in New York with Cleveland Fed President Loretta Mester Chicago Fed President Charles Evans, St. Louis Fed President, James Bullard, New York Fed President John Williams, Boston Fed President Eric Rosengren, and Kansas City Fed President Esther George.